E-commerce platforms adapt features for broader gains
E-commerce platforms adapt features for broader gains
Vietnam’s e-commerce sector is on track for substantial growth, propelled by the growing trend of shoppertainment that is compelling businesses to adapt and innovate.
Vietnam’s e-commerce market has emerged as a beacon of resilience amid global economic challenges, achieving growth rates of 18-20 per cent in the first 10 months of 2024. According to the Ministry of Industry and Trade on December 6, this performance meets government targets and underscores the tremendous potential of the nation’s digital economy.
E-commerce sales are rising thanks to more modern strategies such as using platforms like TikTok, photo Le Toan |
Contributing to this momentum, organisations and individuals engaged in e-commerce paid approximately $4.42 billion in taxes so far this year, a notable 22 per cent on-year increase.
The ministry noted that the sector maintained a remarkable 25 per cent growth rate in 2023, with the market size reaching $20.5 billion. This upward trajectory is expected to continue, with projections indicating the market will expand to $25 billion by the end of this year.
Insights from the Vietnam E-commerce Intelligence 2025 white paper, released last month by YouNet ECI and YouNet Media, reinforce this optimism. The report forecasts that Vietnam’s e-commerce sector will achieve a compound annual growth rate of 35 per cent, propelling its market size to an estimated $49.9 billion by 2028. Key drivers include rising income levels, the shift to shoppertainment, and the movement of high-value products from traditional retail to e-commerce.
Nguyen Phuong Lam, director of Market Analysis at YouNet ECI, stated in the report, “The basis for our positive forecast comes from three clear growth opportunities we’ve identified in the data.”
He clarified that these growth opportunities were driven by the anticipated rise in income levels over the next five years, the growing trend of combining shopping with entertainment to stimulate consumer spending, and the substantial shift of high-value product categories from traditional retail channels to e-commerce platforms.
According to the white paper, one of the most significant drivers of this growth is the rise of shoppertainment, a dynamic trend that seamlessly combines shopping and entertainment. Platforms like TikTok Shop and Shopee have capitalised on this by leveraging interactive content, live-streaming, and influencer collaborations to engage Vietnam’s digitally savvy and trend-focused consumers.
This transformation in consumer behaviour is reinforced by Vietnam’s promising economic outlook. “The country’s GDP is expected to experience rapid growth between now and 2028, driven by rising income levels and a young, consumption-oriented population. Among these, Gen Z stands out as a critical demographic, offering businesses a prime opportunity to harness their substantial purchasing power and engagement with the expanding digital economy,” the report said.
A survey by YouNet Media in May, involving 700 digital consumers across age groups, regions, and genders, offered a deeper look into these shifts. It revealed that 62.8 per cent of digital consumers shop on e-commerce platforms at least once a week, with Gen Z comprising 53.4 per cent of this segment.
“Brands must go beyond traditional approaches. They need to understand Gen Z’s demand for engaging and personalised experiences, which are at the heart of shoppertainment,” Mai Cam Linh, head of business at YouNet Media, told VIR.
Quickly catching on to this, brands have launched numerous campaigns and programmes tailored to boost consumer spending and attract the attention of Gen Z. The application of shoppertainment has proven highly successful for these brands, particularly in the cosmetics, beauty, and food sectors.
Tien Dang, head of Digital CPD at L’Oréal Vietnam, shared the company’s strategic approach to capitalising on the shoppertainment wave during a seminar held in March. He highlighted a successful TikTok campaign that featured the livestream promotion of L’Oréal HA Serum.
“In this campaign, L’Oréal Vietnam partnered with TikTok and over 300 content creators to host sales livestreams for seven consecutive days. This resulted in 8,000 hours of livestream content per week,” said Tien. “The result of the campaign was a threefold increase in sales.”
However, L’Oréal Vietnam has faced significant hurdles in its efforts to develop beauty products on TikTok. “TikTok was initially known for entertainment content, and there was little trust in skincare and beauty content on the platform. For us, understanding consumer insights and behaviours on TikTok proved to be a challenge,” added Tien.
Phuong My, owner of a health-focused business specialising in mushroom-based plant products, told VIR that her business had tested multiple e-commerce platforms, but TikTok Shop proved most effective due to its livestream feature and Gen Z reach.
“Our sales have grown steadily, reflecting our strategies, especially through TikTok,” My said. “By blending entertainment with commerce, our products capture attention and drive quick purchases.”
For Gen Z, My highlighted the appeal of convenience. “Our products, such as mushroom floss and plant-based snacks, are popular because they’re ready to eat. They’re healthy, sustainable, and cater to various dietary needs, aligning with Gen Z’s preference for easy-to-use, eco-friendly food,” My said.
However, My pointed out the challenge of meeting revenue targets while complying with e-commerce regulations. “Platforms need to improve their livestream features to allow small businesses to better implement shoppertainment. Moreover, adding a wholesale connection feature could help them reach a broader customer base,” My said.
